Things to consider when choosing a MT5 hosting provider (Part 1)
MetaTrader 5 (MT5) is one of the most popular trading platforms among brokers and traders. The MT5 platform consists of multiple components, from mobile, web and desktop client terminals, access servers and the main MT5 Server-side components which act as the brain, connecting and serving the rest of the MT5 components.
In a previous blog post, we have covered in detail the aspects that influence the load and performance of the MT5 Server, and in this 2-part blog we are going to continue and discuss the following important considerations, when choosing a hosting provider for the MT5 Server setup:
- What size of server should be provisioned for the MT5 main server?
- Dedicated Baremetal Machine or Virtual Machine hosting?
- In which location should the MT5 main server be hosted?
- How to optimize the setup? What are other important considerations for the MT5 setup? (Part 2)
- What are other important considerations when choosing the hosting provider? (Part 2)
Let’s review things, one by one.
What size of server should be provisioned for the MT5 main server?
MetaQuotes has provided hardware recommendations on their user manual, which should be followed. Dedicated servers should at least be provisioned in accordance with the recommendations. However, there are cases where the recommended system requirements may still not be enough to ensure the servers are running smoothly, as there are multiple factors that affect the performance and load on the MT5 Main Server, which we have covered in detail here.
In the conclusion of our previous blog post, we advised that it is very difficult to quantify which features and plugins may require resources from the MT5 Server, as some loads may also be unknown. Therefore, it is important that the MT5 Server is hosted on a suitable hardware server and infrastructure, and it is essential that the server is continuously monitored, and regular maintenance is required to ensure smooth operations.
Dedicated Baremetal Machine or Virtual Machine Hosting?
This is a frequently asked question by brokers, as they want to ensure that they are offering the best solutions to their customers, but at the same time want to ensure that they can save cost. Below is a quick overview of each option and some of the pros and cons for using them.
Baremetal Machine Hosting
A baremetal machine hosting is a managed hosting service whereby the client leases an entire hardware server.
The benefits of using this type of hosting service are:
- Independent hardware and software
- Dedicated resources (not shared)
- Powerful performance
- High security, isolated
- Ability to monitor resources down to hardware performance
- Easier to troubleshoot issues and latency
- Less risk of incompatibilities
- Full administrator access
Disadvantages of using baremetal hosting solutions:
- Brokers who do not have the technical know-how may struggle to build the infrastructure in-house
- Buying components and replacements can be expensive
- Upgrading server resources takes more time
Virtual Machine Hosting
A virtual machine hosting solution is a managed hosting service that is using virtualization technology to create multiple isolated virtual servers from 1 single server or from a cluster of servers.
The benefits of using this type of hosting service are:
- Scalable, easier to upgrade server resources
- Lower operating cost (sometimes)
- Bulti-in redundancy
- Quicker deployments
Disadvantages of using virtual machine hosting solutions:
- Shared resources
- Lower performance
- May not have full access to server
- Inability to monitor resources down to hardware performance
- Harder to troubleshoot issues and latency
- Higher risk of incompatibilities
Both solutions have their benefits. However, due to the unknowns we mentioned on the previous blog article, what influences the load and performance of the MT5 Server, it is recommended that the main MT5 server and backup server should be hosted with a baremetal hosting provider, to achieve the best performance and isolated environment.
In which location should the MT5 main server be hosted?
This is another FAQ, and it is also a very important question for brokers, as this will affect how soon their main MT5 will receive price updates from their LP(s) as well as greatly influence the quality of order executions.
In this industry, low latency is one of the vital considerations for brokers as well as retail customers. The sooner the prices get to the main MT5 server, the sooner the broker can stream the prices to their customers and also the sooner trade actions can be taken, both on the customer’s side and especially for the orders that are resting on the MT5 server itself. Therefore, the optimal location of an MT5 main server, is in the close proximity to where the liquidity sources are.
Especially for FX and CFDs trading products, the real-time pricing is generated in very few specific locations in the world. One of the main locations is London, where the majority of the liquidity providers and banks that are generating these exchange rates are. Moreover, even inside London, there are specific locations where the pricing and trading engines of these entities are, with Equinix Datacenter LD4 standing out as the main location.
Of course, there are a few other locations from where liquidity providers are offering their liquidity from, such as Equinix NY4 (New York), TY3 (Tokyo) and few others.
Therefore, brokers will have to carefully choose where to host their MT5 Server, and in order to decide they will need to know where their liquidity sources are coming from, for existing and future liquidity providers they are planning to work with. That is why it is important to choose a popular location where the majority of liquidity providers are present, such as LD4 in London, to guarantee multiple options and the optimal trading setup for now and in the future.
What to expect in Part 2
In the 2nd part of this blog series, we will discuss the following points:
- How to optimize the setup? What are other important considerations for the MT5 setup?
- What are other important considerations when choosing the hosting provider?
- Concluding this ‘Things to consider when choosing a hosting provider’ series
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